|
News or no news the indexes are at trend channel resistance and that is that. We were going to be sellers of DE no matter what this morning so today’s news driven pop and drop means nothing to us.
This morning at the open we walked away from DE — Deere common stock and our call option. The net result between the two was gains of $1,085.00 and all for the cause.
Over the weekend we talked about us being at trend channel resistance and to expect a pullback. That stance has not changed and will most likely be the order of the week.
INDEX ACTION AND GAME PLAN FOR THE WEEK Of 5-2 through 5-6
Over the weekend we said and still the order of the week:
"As you can see in both index charts we have a lot of structure. First off we have the current wave count of 3 waves up (abc). If we are going to complete 5 waves up (abc DE) then we still have work to do with a pullback to boot coming (a buy the dips set up?). What’s interesting is that any pullback ought to be contained to the green trend channel support and the neck line support of the head and shoulders bottom. So you see we have a floor baring any unforeseen events.
Remember this potential pullback is healthy and allows stocks to digest the recent thrust up. If we are going to continue to follow the 5 waves up script then we have one more swing higher after a buy the dips pullback. We want to be prepared for that as it’s going to set up a lot of names all in the realm of Pullbacks Off Highs (POH) with a lot of names already doing so that could go at any time.
This doesn’t mean that everything is going to pullback as it’s a market of stocks and stocks are trading to the beat of their own drum as the overall trend is up. We still have a lot of names reporting next week so that too is going to cause a lot of hoopla that we can use to our advantage.
So pace yourself and it’s all about selectively buying the dips and selling the rips as they say with POH’s being the name of the game! Well use pullbacks to start to take on positions all in the realm of 90% of this is getting in the zone and 10% is sweating it out while in the zone."
==========================================================
LONG SIDE WATCH LIST 5-2 AND WE STRESS WATCH
If I were to put money to work here. Where do I put it?
NOTE: It’s earnings season, make sure you know when that is to occur with whatever issue you are stalking.
ALTR
NEW NAME
5-2 Talk to us at the blue support zone
IRBT
5-2 Talk to us near the trend channel support in the face of fear.
AAPL
5-2 Still Pulling back Off Highs (POH)
In speaking with one of our subscribers we got to talking about the cloud stocks, specifically CRM, VMW and one could even say FFIV, NTAP and RVBD (AAPL’s pattern falls into this theme too). You’ll see the same thing we’ve been touching upon, that being a digestion of recent gains in the form of POH’s building.
CRM
5-2 Still Pulling back Off Highs (POH)
VMW
5-2 Still Pulling back Off Highs (POH)
=====================================================
SHORT SELL WATCH LIST
NONE
FEATURED BUT NOT TRADE TRIGGERED BY US
This is where names that we have on our watch list that have triggered but for whatever reason we did not take them (can’t do them all) in our trade trigger alerts. This section is because a lot of our subscribers opt to use our information as they see fit from a do-it-yourselfer standpoint.
Long side
ALLT
5-2 The blue line is definate resistance, its going to take this issue to catch its breath and give it another attempt if its going to go.
If you own it? Enjoy the ride!
5-2 Actually? That’s a pretty big intra-day reversal off the highs, but what do you expect after such a huge move in the short term.
PANL
5-2 Doesn’t like the 57 level for the time being.
SLV
5-2 Getting wide range sloppy here which should come as no surprise.
GLD
=====================================================
All About Options In The World According To All About Trends
NOTE: The exchanges recently started WEEKLY EXPIRATIONS of options. Going forward, make sure that you check to see which ones you are buying. Let’s stay with traditional options expirations which are the ones that expire the 3rd Saturday of every month.
Options Watch List
ALL MAY Expiration Folks
ISRG
NEW NAME
5-2 Still locked in a Pullback Off Highs (POH) as defined by the pink line. Sure up today but it feels more like in association with CEPH/TEVA news. Think same group- Medical birds of a feather flock together.
The strike price we want to look at are the MAY 340 calls. With the stock at 354+ these are priced at 16.30-17.20 which gives you a little room to place a limit order in between the bid ask.
Sure beats coughing up 35,350.00 to own 100 shares.
5-1 All of the names on our long side watch list will also set up call options trades, over the next week we’ll be added them to this watch list.
Current Holdings
DANG (We are now long 3 May 21 call options to open at 3.10)
As we post they are currently at 2.55
MOTR (We are now long 3 MAY 10 Call Options to open at 3.50)
As we post they are currently at 3.20
DE (We WERE long 1 MAY 85 Call Option to open at 9.40)
This morning we used a new driven pop to walk away from this issue at 13.20. In the end we booked a gain of 40%
PAY (We are now long 2 MAY 46 Call Options to open at 7.40)
(We are now long 1 MAY 46 Call Options to open at 8.10 from 4-19-11)
As we post they are currently at 7.80
=======================================================
"Let Your Stocks Tell You What To Do By The Action They Exhibit"
LONG SIDE POSITIONS
DANG (We are LONG 300 shares at 23.51 as of 4-28-11)
5-2 Trying to stabilize here
BSFT (We are LONG 300 shares at 42.89 as of 4-18-11)
5-2 Just base building in between the blue line going sideways.
SPRD (We are LONG 300 shares at 21.17 as of 4-18-11)
5-2 Trying to stabilize here.
DE (We WERE LONG 150 shares at 93.54 as of 4-15-11)
This morning we used a news driven event to walk away and lock gains in this issue at 98.24 which gave us a gain of 5% or $705.00 – all for the cause folks.
PAY (We are LONG 200 shares at 52.00 as of 4-12-11)
5-2 This issue is having trouble in the 55+ range. Not a big deal as of yet but its not going to retest its highs or have a shot at it until it can crossover that level. Support is the blue line.
MOBI (We are Now LONG 150 shares at 12.39 as of 4-11-11)
5-2 Notice how trend channel support also just happens to be the 20 day average? Taking a fair amount of heat today. GOOD we say! Why? We want to add to this position at or near the 20 day average in the face of fear into earnings.
21.65 to a low thus far of 18.23 is a drop of 16% — scary? Not really unless you emotionally chase buses that is. What do you expect, since we bought this issue a few weeks ago it’s put on like 65% + so this is not out of line here. Besides when markets decide to pullback they always take the most extended names first to the downside.
At the rate it’s falling tomorrow MIGHT just be the face of fear trade day.
Note about moving averages. Typically we here at all about trends use the 50 and 200 day simple moving averages however there are times when we’ll use the 20 day and this is one we will because the stock trades so well off of it.
MOTR (We are LONG 300 shares at 13.15 as of 4-13-11)
SHORT SIDE POSITIONS
BIDU (We are now SHORT 100 shares at 127.81 as of 3-23-11)
5-2 Given what we talked about in the beginning index action of the newsletter that all bodes well for this issue to pullback next week. That said IF this issue pulls back to the 50 day/blue line we will cover our short and consider going long.
=============================================================
To our NEW SUBSCRIBERS
What we’ve tried to do is break our watch list down into chart pattern recognition structure from a visual standpoint. Learn the patterns and the components of patterns and you’ll blow those Wall Street MBAs away. You don’t need a $3,000 software program either. All you need is a BURNING DESIRE to be the best that you can be and we’re here to help.
We have a lot of new folks here and we thank you! We want you to take it easy, get to know how the routine works around here for awhile and to feel comfortable.
We hope you all aren’t here because you are chasing performance. For us it’s more about educating and making you the best you that you can be first (that’s what we focus upon!). Like many of our long time subscribers they have all found out that they have no use for traditional Wall Street (and we don’t blame them) and it’s our hope that over time you’ll have acquired enough knowledge from us to say the same with conviction.
One of the most important things we want to stress is that of RISK MANAGEMENT via POSITION SIZING. You don’t need to stack your account with just a few big positions as we’ve seen it time and time again that those who get into trouble are the ones who take large positions and do not employ any risk management system IE shoot for the fences. Those are the people who live on the fringes of extremes and yes ultimately get burned.
As a guideline a good initial system is that of the following example.
Let’s say you have a $100,000 virtual portfolio and let’s say that as a guide you never place more than 10% ($10,000) into any one position. Now let’s say that one day a news driven event hits (over which you have no control over anyway) and one of the positions tanks 20%. On its own that position is sporting a $2,000 loss, while that may seem devastating on its own its really no big deal overall.
Why? Simple its all about risk management being properly employed. What is the impact of a $2,000 loss to the TOTAL VALUE of the virtual portfolio in this example.
Answer: A whopping 2% LOSS. Now you know why we say no big deal.
We can also tell you new people here that you will get stopped out of names and you will take hits. There is nobody on the planet living that has ever hit 18 holes in one and there never will be. We’d rather get you grounded in reality right away vs talking about pie in the sky all the time like a lot of other sites. In so doing your head is screwed on straight from the start and when those days happen (and they will) mentally it won’t mean a thing to you. To us that’s what’s most important is YOUR state of mind as it’s your most important asset. We hope you appreciate our honesty.
We have a very good retention rate here at All About Trends and a lot of great outstanding people here. We like to think that a part of that is being upfront about what can happen (in both directions). Verses those up 500%, I turned $50,000 into $3 million or some other absurd number to get you to bite. That’s not who we are.
WELCOME ABOARD!
================================================
Lastly with regards to taking any trade:
Remember the moment you take a trade you are at the mercy of the market and have no control except when to sell. If you are not willing to take the risk and are not willing to pay that price do not take the trade. We are willing to take that risk knowing full well the end result could be a loss. That said make sure that virtual portfolio management trade size is used accordingly. With any position you may take make sure that should something go awry the amount of total impact to your account does not devastate your acct. Try to stick to a 5% position That’s the key to virtual portfolio management, not biting off more than you can chew.
Remember the mechanics of reality with regards to the stock market states a stock can only do one of three things: Up, Down, Nowhere. The moment you hit the enter button you are at the mercy of the market therefore the only control you have is when to sell/cover. You can’t manage your gains as you have none to manage initially. Knowing this in advance it allows you to stay in outcome, that being you will either:
1. Make a gain
2. Wash
3. Get stopped out at a loss
Remember the market IS the boss. IT is going to do what IT wants to do.
============================================================
SUBSCRIBER ONLY WEB SITE
Don’t forget you can view updates in the middle and the end of each trading day complete with current charts, along with our current performance at our subscriber only web site.
|
